We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in AMG Advanced Metallurgical Group N.V. (AMS:AMG).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
AMG Advanced Metallurgical Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chairman of the Management Board & CEO, Heinz Schimmelbusch, sold €3.8m worth of shares at a price of €29.39 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of €18.08. So it may not shed much light on insider confidence at current levels.
Over the last year, we note insiders sold 205k shares worth €5.8m. In the last year AMG Advanced Metallurgical Group insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like AMG Advanced Metallurgical Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that AMG Advanced Metallurgical Group insiders own 5.4% of the company, worth about €28m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The AMG Advanced Metallurgical Group Insider Transactions Indicate?
The fact that there have been no AMG Advanced Metallurgical Group insider transactions recently certainly doesn't bother us. Still, the insider transactions at AMG Advanced Metallurgical Group in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in AMG Advanced Metallurgical Group, you should check out this free report on analyst forecasts for the company.
But note: AMG Advanced Metallurgical Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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